SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

<ul><li>STI constituents are expected to deliver around 10% earnings growth in their current FYs, with similar growth implied for the following FY.</li><li>Retail flows concentrated in DBS, Singapore Telecommunications, CapitaLand Ascendas REIT, Genting Singapore, and Sembcorp Industries, with OCBC recording both net institutional and retail inflows.</li><li>SATS reported FY26 EPS of 19.2 cents, with current consensus forecast for FY27F EPS at 21.825 cents, illustrating evolving earnings expectations.</li></ul>

STI constituents are expected to deliver around 10% earnings growth in their current FYs, with similar growth implied for the following FY.Retail flows concentrated in DBS, Singapore Telecommunications, CapitaLand Ascendas REIT, Genting Singapore, and Sembcorp Industries, with OCBC recording both net institutional and retail inflows.SATS reported FY26 EPS of 19.2 cents, with current consensus forecast for FY27F EPS at 21.825 cents, illustrating evolving earnings expectations.

STI Hits Record as Focus Shifts to Earnings

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Thematic (Sector/Industry)

Equity Index Total Return Futures (TRF) offer a listed solution to trade the implied equity repo. Market dislocations earlier this year along with elevated equity index volatility and repricing of future dividend payments opened up trading opportunities for market participants that had the ability to price and trade the entire suite of delta one products.Implied equity repo is not very widely traded in Asia but that is changing with the introduction of listed Total Return Futures (TRF) that closely replicate the pay-off of OTC traded Total Return Swaps (TRS). TRFs offer numerous advantages over TRS’ in that they are fully fungible, centrally cleared (mitigates counterparty risk), and portfolio margined (offering margin offsets with other listed products). Japan implied equity repo has been volatile over the last few years partly due to the Bank of Japan’s ETF buying program opening up trading opportunities and attracting a new breed of investors to the TRF product. There has been renewed interest in trading TRFs due to heightened equity market, repo and dividend volatility during the COVID-19 pandemic.With LIBOR scheduled to be phased out by December 2021, there is pressure on market participants to migrate positions to a different benchmark. The SGX Nikkei 225 TRF uses MUTAN (Uncollateralised Overnight Call Rate) as the benchmark for the floating rate and is a viable alternative for market participants that are looking to migrate from an OTC product linked to LIBOR to a listed alternative that does not reference LIBOR.

Equity Index Total Return Futures (TRF) offer a listed solution to trade the implied equity repo. Market dislocations earlier this year along with elevated equity index volatility and repricing of future dividend payments opened up trading opportunities for market participants that had the ability to price and trade the entire suite of delta one products.Implied equity repo is not very widely traded in Asia but that is changing with the introduction of listed Total Return Futures (TRF) that closely replicate the pay-off of OTC traded Total Return Swaps (TRS). TRFs offer numerous advantages over TRS’ in that they are fully fungible, centrally cleared (mitigates counterparty risk), and portfolio margined (offering margin offsets with other listed products). Japan implied equity repo has been volatile over the last few years partly due to the Bank of Japan’s ETF buying program opening up trading opportunities and attracting a new breed of investors to the TRF product. There has been renewed interest in trading TRFs due to heightened equity market, repo and dividend volatility during the COVID-19 pandemic.With LIBOR scheduled to be phased out by December 2021, there is pressure on market participants to migrate positions to a different benchmark. The SGX Nikkei 225 TRF uses MUTAN (Uncollateralised Overnight Call Rate) as the benchmark for the floating rate and is a viable alternative for market participants that are looking to migrate from an OTC product linked to LIBOR to a listed alternative that does not reference LIBOR.

SGX Nikkei 225 Total Return Futures: Repo & Dividend Volatility, and LIBOR Phase Out To Drive Growth

Equity index futures are one of the most liquid financial instruments in use globally and serve as an alternative to buying the securities in the underlying cash market. With different types of market participants trading index futures, bid-ask spreads are tight and there is liquidity on both sides of the order book.The users of index futures include asset managers, hedge funds, high frequency traders, index arbitrage traders, delta one/ stock loan desks, volatility traders, ETF authorised participants, as well as retail speculators.The Trade at Index Close (TAIC) functionality on the SGX Nikkei 225 index futures enables market participants to transact the Nikkei 225 index futures based on end of day prices of the underlying Nikkei 225 index. TAIC reduces the risk of trading index futures at the close while trying to match the closing print of the underlying cash index.With most companies in Japan going ex-dividend on the same day but only paying out the cash dividend a few months later, the TAIC functionality is a valuable tool for market participants to reinvest the dividends back into the index via the index futures on ex-date and avoid cash drag and tracking error.

Equity index futures are one of the most liquid financial instruments in use globally and serve as an alternative to buying the securities in the underlying cash market. With different types of market participants trading index futures, bid-ask spreads are tight and there is liquidity on both sides of the order book.The users of index futures include asset managers, hedge funds, high frequency traders, index arbitrage traders, delta one/ stock loan desks, volatility traders, ETF authorised participants, as well as retail speculators.The Trade at Index Close (TAIC) functionality on the SGX Nikkei 225 index futures enables market participants to transact the Nikkei 225 index futures based on end of day prices of the underlying Nikkei 225 index. TAIC reduces the risk of trading index futures at the close while trying to match the closing print of the underlying cash index.With most companies in Japan going ex-dividend on the same day but only paying out the cash dividend a few months later, the TAIC functionality is a valuable tool for market participants to reinvest the dividends back into the index via the index futures on ex-date and avoid cash drag and tracking error.

SGX Nikkei 225 Futures: Using The Trade-At-Index-Close Order Type

Over the last few years, with the advent of listed dividend futures, a large spectrum of market participants have started to trade dividends making it an asset class in its own right. With heightened equity market volatility and unprecedented central bank intervention, investing and trading in dividends via the SGX Nikkei 225 Dividend Futures provides market participants with a pure play on company fundamentals without taking on any of the equity valuation risk. This has increased liquidity in the product and expectations are for volumes and open interest to continue to grow over time.
Equity implied repo, on the other hand, is not as widely traded but that is changing with the introduction of listed Total Return Futures (TRF) that closely replicate the pay-off of OTC traded Total Return Swaps (TRS). TRFs offer numerous advantages over TRS’ in that they are fully fungible, centrally cleared (mitigates counterparty risk), and portfolio margined (offering margin offsets with other listed products). Japan implied equity repo has been volatile over the last few years partly due to the Bank of Japan’s ETF buying program opening up trading opportunities and attracting a new breed of investors to the TRF product. The SGX Nikkei 225 TR Index Futures offer a trading vehicle to get exposure to the index repo.

Over the last few years, with the advent of listed dividend futures, a large spectrum of market participants have started to trade dividends making it an asset class in its own right. With heightened equity market volatility and unprecedented central bank intervention, investing and trading in dividends via the SGX Nikkei 225 Dividend Futures provides market participants with a pure play on company fundamentals without taking on any of the equity valuation risk. This has increased liquidity in the product and expectations are for volumes and open interest to continue to grow over time.
Equity implied repo, on the other hand, is not as widely traded but that is changing with the introduction of listed Total Return Futures (TRF) that closely replicate the pay-off of OTC traded Total Return Swaps (TRS). TRFs offer numerous advantages over TRS’ in that they are fully fungible, centrally cleared (mitigates counterparty risk), and portfolio margined (offering margin offsets with other listed products). Japan implied equity repo has been volatile over the last few years partly due to the Bank of Japan’s ETF buying program opening up trading opportunities and attracting a new breed of investors to the TRF product. The SGX Nikkei 225 TR Index Futures offer a trading vehicle to get exposure to the index repo.

Dividends and Repo as Asset Classes - Focus on the Nikkei 225 Index

Yangzijiang Shipbuilding / Equity Bottom-Up

<ul><li>In 1Q26, STI ETFs recorded 13 consecutive months of net inflows, totaling S$981 million, with AUM reaching S$4.2 billion.</li><li>Share buybacks in Singapore reached approximately S$560 million in 1Q26, led by Singtel's S$2 billion programme.</li><li>The SMID segment attracted close to S$470 million net institutional inflow in 1Q26, with combined ADT nearing S$670 million.</li></ul>

In 1Q26, STI ETFs recorded 13 consecutive months of net inflows, totaling S$981 million, with AUM reaching S$4.2 billion.Share buybacks in Singapore reached approximately S$560 million in 1Q26, led by Singtel's S$2 billion programme.The SMID segment attracted close to S$470 million net institutional inflow in 1Q26, with combined ADT nearing S$670 million.

Singapore

Singapore Exchange operates as an integrated securities and derivatives exchange, related clearing houses, and an electricity market. It is a multi-asset exchange conglomerate providing listing, trading, clearing, settlement, depository, and data services across equity, fixed income, currency, and commodity markets. The company is headquartered in Singapore and was founded in 1999.

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Singapore Exchange (SGX SP)

STI Hits Record as Focus Shifts to Earnings

STI constituents are expected to deliver around 10% earnings growth in their current FYs, with similar growth implied for the following FY. Retail...

Singapore Exchange Ltd (SGX)

SGX Nikkei 225 Total Return Futures: Repo & Dividend Volatility, and LIBOR Phase Out To Drive Growth

With LIBOR scheduled to be phased out by December 2021, the SGX Nikkei 225 Total Return Futures provide a high quality alternative to access Japan...

Brian Freitas

SGX Nikkei 225 Futures: Using The Trade-At-Index-Close Order Type

Equity index futures are one of the most liquid financial instruments in use globally and serve as an alternative to buying the securities in the...

Brian Freitas

Dividends and Repo as Asset Classes - Focus on the Nikkei 225 Index

Over the last few years, with the advent of listed dividend futures, a large spectrum of market participants have started to trade dividends making...

Brian Freitas

STI Books 5.6% Total Return in 1Q26

In 1Q26, STI ETFs recorded 13 consecutive months of net inflows, totaling S$981 million, with AUM reaching S$4.2 billion. Share buybacks in...

Singapore Exchange Ltd (SGX)

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